Heads of Terms for Licence for Alterations to Business Property

Heads of Terms for Licence to Alter

These Heads of Terms for Licence to Alter are to assist the landlord and tenant in agreeing the most important details concerning a tenant’s proposed alterations before the parties sign a Licence to Alter.

Commercial leases generally prohibit the tenant from making alterations unless the landlord’s consent has been obtained. Since most tenants require some changes to be made to the premises to suit their individual business needs, a landlord is very likely to receive a request for consent to alterations at some point during the term of the lease. The landlord’s consent is usually given by way of a formal licence to alter.

Usually, the landlord is under a legal duty “not to unreasonably withhold or delay consent”. The landlord must therefore give prompt attention to the tenant’s request and must either agree to give consent or give reasonable grounds for refusing consent. If the landlord does not object to the alterations these Heads of Terms can be prepared in advance of producing a licence to alter.

The heads of terms can be used for any type of business property, including shops, restaurants, offices and industrial premises. They can be used in conjunction with the Licence for Alterations (for significant works) or the Letter Licence to Alter (for more minor works).

The heads of terms prompt the parties to record administrative information, such as their contact details, and details of the lease, and to set out what has been agreed in relation to the proposed alterations. Plans and specifications showing the proposed works should be attached to the heads of terms.

Landlords should refer to the Protocol for Applications for Consent to Carry out Alterations when handling an application for consent to make alterations to premises. The Protocol can be found at http://www.propertyprotocols.co.uk.

This template is duplicated in the Commercial Occupiers group of documents under Occupier Alteration Consents.

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